How Christian Entrepreneurs Debating With Pastors Created American Economics

In his book Heavenly Merchandize, theologian Mark Valeri shares his insights on a foundational story of America through the men who actually lived and forged it. It is the story of how America’s economic system unfolds from the interaction between New England Puritan merchants and clergy of the late 1600s and early 1700s.

Why is this important? It is the story of the most prosperous economic system the world has ever seen – no other society comes remotely close to achieving its level of prosperity. It is also the moral and ethical foundation to our society as a whole. It is the story of Christendom’s building blocks which underpin our economic foundation, and the dichotomy which God often embeds into His work within the societies of His children. It is, as Adam Smith made famous, the “invisible hand” of Providence working favorably in the marketplace.[1]

In early Puritan New England, the clergy, as has been the norm for either pagan or Christian societies historically, held contempt for commerce. They preached this scorn from the pulpit, and, as leaders in their communities, created a culture of condescension for profitable business. At first, the Puritan merchants complied, but soon they began to question their clergy’s disdain for their success. This questioning is ultimately the story Dr. Valeri tells through the pens of the men who forged it in their own communities, but, as a result, would actually embed it into the America ethic. Valeri explains that “The pursuit of wealth as an indication of otherwise mysterious divine favor, and the primacy of diligence, industriousness, and frugality as moral virtues helped to create the ethos of early capitalism. It molded a truly modern economic personality.”[2] Christian morality remained in colonial America but the mysticism of divine favor would fade.

Valeri begins this story in the mid-1600s with John Winthrop and the Massachusetts Bay Colony. At this time and place, the church and civil government were one in the same. The pulpit not only preached the ethics of business but controlled business behaviors as the civil government was also the church officials, including the pastor. The church demanded that success was steered back into the church and community. But, since the more successful merchants were usually heavily engaged in the church and the community, it was not typically much of an issue. Valeri explains that colonial merchant Robert Keayne “had the generosity to give [much of his money] to Boston, and the town’s leaders had the obligation to use it prudently,”[3] which they did. This was a typical occurrence that helped to build successful commerce in and out of the colonies, fund the towns as they grew in both population and trade, and also fund the parishes as they expanded.

For all practical purposes this arrangement was accepted and upheld willingly and with fortitude as it was mutually beneficial. This combination helped to implant ethical behavior into local business and their owners and also into the community – both the social culture and the local governance. Keayne, while in England before he transplanted to Boston, “increasingly became involved in a tight-knit religious community that offered a steady dose of preaching and spiritual advice for young merchants in London.” He brought this business piety of his Puritan spirituality with him to New England. “Fixed on biblical conventions and religious discipline, they set godliness against mundane rationales for merchant success,” informs Dr. Valeri. Another critical attribute the Puritan merchants practiced “stressed obligations to the local congregation and its immediate social context – neighbor-to neighbor-relationships – as the criteria for economic virtue.”[4] Valeri also reports how the Puritan community would “condemn” businessmen who would circumvent prices for local goods by purchasing them and marking prices up to sell in areas where the products were more scare, as well as hoarding to force higher prices. Puritans would also excoriate usury and the use of lawyers, brokers, and notaries.[5] These critiques were regularly preached from the church pulpit:

[The Puritans] expelled profiteers from their congregations, hounded usurers out of their parishes, turned common fields to poor relief, authored town covenants that set limits to prices on common goods and services, and insisted that their well-to-do parishioners provide easy, even free, credit to the needy. Theirs was a conservative economic program with a vengeance.[6]

Harsh as it was, this forced morality had a long term impact on business ethics in America, which drove forward to the Founding generation, and carries forward to America to this day. It implanted the most moral system of business and economics the world had ever seen and allowed for a moral underpinning which would eventually propel, not only America, but the entire planet forward in abundant living. Certainly we are not perfect in this execution and morality, but neither were the early Puritans of New England. But the new moral standard was critical to allow business to grow and thrive for people in all classes of society.

Pastors, like John Cotton, would use Scripture to argue their points against merchants who did not abide accordingly.[7] Essentially their stand was based much on the Torah, New Testament teachings, and putting God’s Laws into practice. Virtue and covenants were key to their community and commerce. Tension and exchange between English common law and Scripture ensued. Although much of English common law was grounded in Scripture it had ebbed and flowed over the centuries, and the Puritans of New England desired to be more grounded in direct Scriptural laws. Pastor Cotton, for example, co-authored several constitution proposals, along with an attorney, with law code which rested upon common law, scriptural codes, and natural law.[8] This tension and inclusion would continue for decades. But God’s Law would always be the undertone. It was really the matter of how to include, interpret, and administer it into civil law which created the dynamics and sometimes tension. “Civil law would conform to godliness only if electors, juries, legislators, and magistrates derived their judgements from Christian principles,” rested in the minds of New Englanders discloses Valeri. This disposition also lead Colonists to be concerned that “Unbelievers’ ‘unacquaintance with the Law of God’…blinded them to proper moral judgements.”[9] This tension and underpinning was present at the Founding of the United States, and is still present today in our civil governance. Also present and center to the theological and civil discussion was the correlation between America and the nation of ancient Israel; likewise, this would be an underpinning to the American belief system at our Founding and carry forward by many Colonial pastors and legislators.[10]

The Laws of Nature, which is the moral standard the United States is bound to in its Compact, is also God’s Law which the Puritans strived to conform to in their civil government and their commercial ethics. It began with John Winthrop in his 1630 sermon on their ship, Arbella, titled A Model of Christian Charity.[11] Cornell historian of medieval church history and law, Brian Tierney, notes in his in-depth treatise on natural rights and law that “In fact one finds natural rights regarded as correlative with natural law at every stage in the history of the doctrine – in the twelfth-century renaissance of law, in the eighteenth-century Enlightenment, and still in the twentieth-century discourse.”[12] Arguably the tension and revelations of 17th and 18th century New England clergy and merchants rooted natural law and rights into the American economic practice and ethics.

In the New England communities “merchants could practice their trade and piety at once.” Also these merchants were “surrounded by fellow church members who knew firsthand the demands and customs of commercial life.”[13] The culture of Puritan New England allowed for businessmen to serve as “a civic patron, public benefactor, and devout believer all at once.”[14]

But as the late 1600s arrived, many merchants began to shift. They realized, even before their pastors, that making more profit, as long as it was made lawfully and by serving their customers, not only did not violate God’s Law, but put them in a position to be behaving in the image of God. God was a creator; they were also creating – creating useful and valid products, which served their follow man. These behaviors were virtuous and just. So while they supported their church, others in need, and their communities, they were being righteous. Profit was a reward for this behavior and allowed them to serve by expanding good business and support their communities more significantly.[15]

During this period the merchants did increase their giving due to their piety as well as from pastoral pressure, but they also began spending more on their own lives; their clothing, homes, furnishings, and the like. Successful merchant, Samuel Sewall, told his pastor, Cotton Mather, “that he was more than willing to fulfill his neighborly duty to charity but not ready to play the fool.”[16] As the transition progressed, Puritan merchants maintained their affairs by emphasizing “fiscal, prudential virtues of punctuality, accuracy, and industry” in their business practices, while not always being as openly pious as their former Puritan colleagues in their direct business exchanges. The Puritan gift had become embedded in their business and economics, which would transcend ethical business practice in the American culture – it “signified a further transition in the sensibilities of puritan merchants.” [17]

As Colonial America in New England moved into the late 1600s and early 1700s, the Puritan clergy began to accept this transition of their merchant parishioners. They began speaking from the pulpit in terms of natural law in business practices, taxes, contracts, and popular sovereignty. Unlike their earlier clergymen who would disparage such behavior, they “applauded” such business practices as “fit for divine service.”[18] Also, per capita income in the colonies was rising during this period, which would eventually catch the eye and desire of England to commandeer through taxation to cover their war debt.[19] But the self-reliant fortitude from a popular and Biblical belief in sovereignty, which would cement in a deep-seeded self-government and natural right to property attitude, would send Colonial America into strong resistance and eventual rebellion against the Mother Country. Much of this liberty was seeded by the transition of the Puritan merchants.

Pastor Cotton Mather “advised the young merchants to understand that ‘he may Glorify God, by doing Good for others, and getting Good for himself.’”[20] Valeri reveals that “To this extent, commerce and knowledge of God went hand in hand.”[21] As the transition continued, many clergy would write pamphlets and essays addressing the validity of God and good commerce and economics. With this transition, America transitioned. Dr. Valeri elaborates:

Another set of Boston ministers and their merchant parishioners, whose careers overlapped but extended beyond the likes of [Pastor Cotton] Mather, [Pastor Samuel] Willard, [merchant Samuel] Sewall, and [merchant Thomas] Fitch, began to understand the market not merely as a political good but as a universal and natural imperative. They also shaped the market to religious ideas, but we can mark Mather and Sewall, Willard and Fitch, as the last generation to embody fully a puritan conception of the economy.[22]

The transition to the American market economy that we know today continued into the 1700s as the Colonies rose in trade and wealth. “During the first decades of the eighteenth century,” discloses Valeri, “an increasing number of Bostonians came to regard luxuries as their reward for economic competence, material indications of a comfortable, polite, and therefore respectable life.”[23] The framework for the American economic ethic had been set; originally derived out of contempt for profitability by the early Puritans, but as they softened, then embraced profitable business and financially successful merchants, the underlying morality remained intact. This fundamental framework would underpin the rebellion of the Revolution of 1776 as well as the rise of America’s economic prowess in the Industrial Revolution. This underpinning would lead America to an economic status the world had never before witnessed. This shining light of abundance would also begin spreading like a wildfire throughout the globe in the 20th century and into the 21st century.

As the early 1700s rolled into New England, the pulpits had mostly shifted in support of commerce. Pastor Ebenezer Pemberton correlated business and commerce through natural law by stating that “God ruled humanity through a universal, which is to say natural, law.”[24] Pemberton put forth that “’virtue, wisdom, reputation increases wealth and outward prosperity’ by the ‘wise and sovereign institution of God,’ and ‘Do you own business’…promised prosperity in return for such efforts.”[25] In his lectures and sermons he would correlate the rewards as a result of these behaviors to Natural Law. The colonial pastors correlated obedience to God and individual productive behavior as a result of being made in the image of God. Dr. Valeri summarizes the clergy’s message to their parishioner merchants as “God designed the market as a system that ran by moral laws…[The Colonial pastors] described commerce as a series of natural exchanges that, by the law of nature, coalesced into a balanced system.”[26] Pemberton and his contemporaries had made the shift, and took this message to their parishioners.

Valeri writes:

The cumulative transformation effected by [the postpuritan clergy] profoundly influenced the ministers and merchants who led New England into a free market and political independence. Religious sanction for market exchange had become a commonplace in Boston by the 1740s.[27]

Many sermons became “the central dynamic between religion and commerce during the mid-eighteenth century,” declares Valeri, as “pious merchants understood their spiritual duty to reside in the cultivation of reasonable moral sentiments[28] in the midst of a market run by natural principles[29].”[30]

Up to the mid-1700s, the clergy not only maintained this view but expanded it. Dr. Valeri explains that “They merely extended its application to the shifting political and economic events of the day,”[31] Sticking to practicing morality, being virtuous, and maintaining their piety in their commercial endeavors, the pulpit still expected generosity to the church, the poor, and the community. Expansion of the merchant’s personal wealth and business was even accepted as moral as well “because God designed the social system to reward virtue.”[32] “[The New England pastors], reports Valeri, “deemed access to free trade a religious duty,”[33] thus solidifying one of the major tenants of the framework of Americanism, and setting the stage as the 1700s moved into the Revolutionary period. Now America’s pastors would wield their contempt toward England and lead their parishioners to independence.

Dr. Valeri tells the story of the birth of American economics. It is the story of the struggle between piety and secularism, between God’s Law and man’s law, between morality and perceived success, between what is right and what is wrong. The same struggle resides with us to this day. Dr. Valeri captures the true essence of the era as he tells the story just as it emerged in the New World. He tells the actual story of actual people, our Forefathers, and their struggle to understand, practice, and grow in wisdom and execution. Their story is our story in that they are our history and we are their legacy. They worked diligently to create a moral society and moral economy which would properly and ethically support everyone. While it may not be perfect, one thing is absolute; it has raised the wealth and wellbeing of Americans beyond anything the world has seen. Our Forefathers planted America as the Shining City upon the Hill which has directly impacted the entire planet with a meteoric rise in wealth and health. The world continues to rise in these areas. Dr. Valeri’s book, Heavenly Merchandize, illustrates that we must maintain the struggle of our Forefathers for not only ourselves and our posterity, but for the benefit of the world. It is truly heavenly merchandize.

[1] See Adam Smith, 2014 (originally published in 1759), The Theory of Moral Sentiments, (Lexington, KY: Economic Classics), p. 158, and Adam Smith, 2007 (originally published in 1776), An Inquiry into the Nature and Causes of The Wealth of Nations, (Petersfield, Great Britain: Harriman House Ltd.), p. 293.

Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.

Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.

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